CYBG to shake up challenger bank market with $1.6 billion offer for Virgin Money
08 May 2018 | 5882 views | 4
Clydesdale Bank and Yorkshire Bank has made a £1.6 billion takeover offer for Virgin Money in a move which may herald a shake-up of the UK's challenger bank market.
Virgin Money is currently considering the offer, which would create a brand with six million personal and business customers capable of taking on the UK's biggest lenders.
Virgin Money spent £38.3 million last year building the technology backbone for a new digital challenger bank, while CYBG launched its own online and mobile-only bank B, back in 2016.
Commenting on the proposed deal, Thomas Moore, investment director for UK equities at Aberdeen Standard Investments, told the BBC's Today programme that it was possible that the proposed takeover could trigger a wave of deals among other challenger banks.
"What the UK needs is strong competition between strong banks," he said."If you have too many small lenders... without the scale economies that the likes of Lloyds and RBS has, then you'll find that the competitive environment is too tilted in favour of those big mainstream banks."